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BSE-related restrictions lifted, but will it help?

In a recent move specific to U.S. products, Indonesia reopened the market to imports of U.S. bone-in beef, offal and beef products – items that had been banned following the BSE case detected in California in April 2012. This action was taken after the World Organization for Animal Health (OIE) upgraded the BSE risk classification for the U.S. from controlled risk to negligible risk. Except for certain specified risk materials, the market is now open to U.S. beef and beef products from cattle of all ages.

This appears on the surface to be a very positive development for U.S. exporters. However, it will be of limited benefit to the U.S. industry unless importers are able to navigate the permit system and get the product into the country.

In mid-July, Indonesia’s Ministry of Trade announced it might adjust the volume of imported beef allowed into the country in order to stabilize supplies and ease the pressure on beef prices. The announcement, however, included only vague details of a domestic price trigger mechanism that will be used to determine whether the import volumes will be increased.

Is there any relief in sight?

In January, the Office of the U.S. Trade Representative (USTR) announced that the U.S. would request consultations with Indonesia under the dispute settlement provisions of the World Trade Organization (WTO) concerning many trade-restrictive measures, including those targeting imported beef. USTR is pressing ahead with this case, as Indonesian officials continue to publicly defend their misguided and unrealistic goals for beef self-sufficiency.

Responding to consumer unrest over rising prices and pressure from its major beef suppliers, Indonesia has tweaked its import policies but the changes don’t go nearly far enough to bring it into WTO compliance. For Indonesia to reach its potential as an export market for U.S. beef, it must first acknowledge that it does not have the capacity to achieve self-sufficiency and then introduce trade-compliant import policies.

This isn’t likely to happen without continued pressure from the U.S. – along with Australia, New Zealand and other beef-supplying nations.

Joe Schuele is communications director for the U.S. Meat Export Federation.